The Guardian has obtained New York records on the number one sportsbook, FanDuel, that shows it tried to blunt the impact of New York state advertising and marketing rules put into effect to help minimize harm.
FanDuel pushed back on the ban of certain words and phrases because it might attract possible problem gamblers.
The company also reportedly voiced opposition to a ban on sports betting advertisements in the vicinity of college campuses, where the majority of students are underage when it comes to sports betting. Documents secured through the Freedom of Information Act by The Guardian spell out the efforts FanDuel exerted to register its objections to the rules, thus hoping for a better ruling. The opposition did no good, as the New York State Gaming Commission (NYSGC) stood its ground.
The Guardian focused on New York because it ranked as the largest market. Bettors wagered $2.1 billion in November alone. To seek such a treasure required billions in advertising.
What this says to problem gambling lobbyist Brianne Doura-Schawohl is that operators sang a different tune once in play than they did before sports betting debuted.
“It seems not only disingenuous to the public, but also the policymakers that probably took many of them at their word that responsible gambling was a priority,”she told the outlet.
The gambling industry is “utilizing consumer welfare and responsible gambling practices to legalize markets”, added Doura-Schawohl. “But when there is an opportunity to influence regulations, they are trying to overturn and undo any obligations they have to the very consumer protections they promised were a pillar of their business.”
In a memo on September 27, FanDuel raised concerns over a rule that barred them from the use of keywords which may attract problem gamblers. FanDuel referred to the ban as “extremely subjective and impractical to enforce”, drawing comparison with “a liquor store not being able to advertise to customers who ‘may be’ alcoholics”, according to Edmund Burns, the general counsel at the NYSGC.
A gambling advertisement across the street from a freshman dorm could be “objectionable”, even if not on land actually owned by the college.
Yet another regulation held operators responsible for misleading ads fostered by companies hired by FanDuel, claiming it’s up to the sportsbook to control who it hires and their message.
FanDuel also requested the commission eliminate a proposed rule requiring operators to run a compulsive-gambling assistance message in their fantasy sports ads. It takes up too much space in its ads, according to Burns.
FanDuel also suggested eliminating anti-money-laundering requirements – such as the need to establish internal policies, procedures and controls, and conduct independent audits supplied to regulators and the state register. The commission’s staff defended the measure.
Jim Maney, the executive director at the New York Council on Problem Gambling, opposed FanDuel’s pushback and even mentioned the operator should do more. “I think industry could do more to assist,” he said. “It may be burdensome, but we have to make sure that we are protecting the most at-risk populations.”
FanDuel and Fanatics have their own fight with the Ohio Casino Control Commission over similar rules. Mostly over non-gambling issues.
Fanatics banked on its major difference from competitors to gain an edge over the big boys in mobile sportsbooks. The difference: a digital merchandise store selling sports paraphernalia, the kind of retail business which made owner Michael Rubin a very wealthy man before entering sports betting.
The Fanatics plan is to use the retail component as an incentive to promote the sports betting component among bettors. In Ohio, regulators see such steps as a possible come on to the underage and vulnerable and want to control the stakes more. A proposed regulation seeks to restrict how promotion offers link to non-gaming.
Fanatics Betting & Gaming and FanDuel complain that such rules are not realistic for their business or too vague.
The new recommendations followed Fanatics compliance with a commission order to scratch a bonus bet to patrons who bought merchandise from retailers. The Ohio Casino Control Commission (OCCC) worried the offer could reach those below 21 as well as those on the voluntary exclusion list.
The new proposal to update regulations to cover such issues states, “Sports gaming proprietors must not offer a promotion bonus in connection with or as a result of a non-gaming consumer transaction” unless it is offered only to those who are age-verified not potential problem gamblers or not on the voluntary exclusion list.
In its response to the OCCC, Fanatics denied that marketing the sportsbook to its retail customers resulted in an increased risk of problem gambling. Fanatics said such a marketing strategy “that focused on speaking to Fanatics customers when they engage with Fanatics businesses is not just a sound business decision, but a more responsible means of marketing.”
Fanatics’ merchandising customers are “overwhelmingly 21 and older and a significant percentage of those customers are interested in or currently engaged in sports wagering,” it asserted.
Should the commission implement the revisions, Fanatics will reallocate its resources to other marketing mediums such as television where a higher percent of minors and problem gamblers would be exposed.
Fanatics recommended adjustment of the regulation, so it only applies to direct marketing, personalized offers made by mail, email or text. If tied to consumer purchases at a time when other companies use offers in conjunction with national media companies, Fanatics is penalized.
Fanatics and FanDuel both contend age verification and participation on the exclusion list is next to impossible to ascertain under this circumstance.
FanDuel wrote such an expectation is “unprecedented,” in that “it is not feasible for that same level of verification to be applied to individuals engaged in non-gaming consumer transactions, especially when such transactions take place with a third party.”
FanDuel called for a revision to require operators try “commercially reasonable efforts to prevent individuals who are under 21 or participating patrons enrolled in the voluntary exclusion list.”
